“a marked increase in the level of co-operation between NAMA and its clients in light of its recent enforcement actions”

So says today’s Irish Independent citing a NAMA spokesperson. There might be some that would say the agency “would say that, wouldn’t it?”. The newspaper goes on to report that two developers understood to be in the NAMA Top 10, Joe O’Reilly and Michael O’Flynn have “signed-off” on their business plans with NAMA. And that of the NAMA Top 30, “11 have now signed a memorandum of understanding”.

(3) seven had been subjected to foreclosure proceedings (NAMA didn’t identify the seven but the view on here is that they are Liam Carroll, Bernard McNamara, Derek Quinlan, Paddy Kelly, Ray Grehan, Paddy Shovlin and David Courtney/Jerry O’Reilly (Radora)) NAMA has acted against a lot of other developers but I don’t think that Jim Mansfield or Capel Developments, for examples, are in the Top 30, but because NAMA hasn’t provided confirmation, this is little more than informed speculation

(4) five hadn’t signed memoranda of understanding and might face enforcement proceedings

Newspaper reporting subsequently speculated that two of the five developers might face enforcement action this week, that is, by Friday 13th May, 2011. The NAMA spokesman told the Independent today that although a developer might sign a memorandum of understanding “it didn’t mean the agency wouldn’t move against them and appoint a receiver if they failed to honour the terms of those agreements”. The view on here is that there more than a little of the “hanging a corpse at the crossroads to deter criminals” in NAMA’s approach.

Despite all of the above, it is unclear whether NAMA has in fact finalized any agreement with any developer. Remember that there are three documents which comprise an agreement, according to the NAMA CEO, Brendan McDonagh

(1) Memorandum of Understanding

(2) Heads of Terms

(3) Final Agreement

And each of these three documents needs to be signed by

(1) NAMA

(2) the developer

(3) potentially, the developer’s wife

Yesterday was the first year anniversary of the completion of the transfer of Tranche 1 comprising the Top 10 developers who owe an average of €1.6bn; the average owed by the Top 30 is €0.9bn so these are very big enterprises for sure and the business plan is vastly more complex than when you’re looking for a €10k loan from the bank for some office equipment. That said, if it was known in 2009 when NAMA was being conceived that it would be the middle of 2011 when the first plans were agreed, there would have been incredulity or outrage – it is high time for NAMA to have concluded agreements.

UPDATE: 11th May, 2011. The Irish Times today writes that it “has learned” that Sean Mulryan of Ballymore fame has “reached agreement with NAMA on a business plan in recent days”. That would bring to three, the number of developers that have been identified in newspaper reporting as having entered into agreements. There are two curious aspects to the Irish Times report – firstly, the newspaper doesn’t confirm if Sean Mulryan has signed all three documents that comprise agreement or whether NAMA has also signed those documents and secondly, the newspaper repeats the Irish Independent claim yesterday that 12 developers had signed memoranda of understanding whereas NAMA last week said that 16 had. Maybe the Irish Times is just copying the Independent without checking the detail but it is curious because if the Irish Times and Independent were both correct, then that would indicate NAMA wasn’t being completely truthful last week.

UPDATE: 15th May, 2011. The Galway News citing the Sunday Times claims that developer John Lally and his companies Lalco and Sova Properties have signed a memorandum of understanding with NAMA. It’s not clear if John is a Top 30 developer and there doesn’t appear to be any comment from NAMA.

@Simon, that is a very good point and applies to other developers as well who might have been at the receiving end of NAMA foreclosure action. The larger scale developers will have a large number of companies – just reviewing the Regeneration Developments Limited accounts (Limerick Opera shopping centre project – see post yesterday which includes the full accounts and return), I see that one director, Jerry O’Reilly had 102 additional company directorships in July 2009. Receivership can apply to one or a number or all companies with which a developer is associated. Indeed NAMA is now appointing property receivers which might conceivably mean some assets in a company are subject to receivership whilst others are not.

NAMA appointed receivers to Radora Developments Limited which was said in the press to be associated with Jerry O’Reilly but it is not included in the 102 companies of which Jerry was a director in July 2009 (it is included as a company of which David Courtney is a director).

So yes, we need to be careful not to conclude that a NAMA receivership means all the companies or assets belonging to a developer are affected.

This raises another important question. Despite the fact that most developers have multiple companies, is NAMA treating each company as an individual entity, or has there been any effort to amalgamate companies together under the umbrella of the developer who actually owns them all.

Also, given the sheer amount of companies and the required board members, how many people in NAMA might have actually sat (or be sitting!) on some of these boards?

Nama is an abject failure. This PR exercise it undertakes is beginning to look embarrassing. So 12 months on still not a single business plan concluded and commenced? No, no you’re doing a bang up job there boys. Only another 570 or so business plans to go, but I’m sure it will get easier as we go along. And all the time the FEEding frenzy continues. McWilliams was right, this is a bailout for the professional classes not for developers or banks. Oh but I’m sure that when you sell those 10 or 15 “prime assets” in london you won’t hesitate to slap yourselves on the back and bonuses all round. What a great job you guys are doing

@OMF: It’s a “pick ‘n mix” and very confused indeed. There is no consistency and no rational pattern. It depends on different banks, different partner relationships and seems almost random. I am aware of one developer that is in 7 different business plans. He is not unique. Some of them have had receivers appointed to selected properties, others not. As I said, there is no consistency.

NAMA is very much jobs for the boys and securing same for the next ten years. One simply has to look at their performance compared to that of the non NAMA banks who are significantly more advanced in relation to the clean up. NAMA developments still lie idle and non revenue generating whilst non NAMA developments have tenants in place or are being prepared for sale. But hey whats the rush we have ten years say the NAMA boys and we need to be careful not to flood the market and in so doing put downward pressure on prices. Therefore lets use red tape to wrap up all these unoccupied dwellings and blame someone else for the delays. NAMA must be answerable to someone and run as a business not a club.

Just two quick questions
1.Any further updates on Bernard McNamara,Liam Carroll and Pat Doherty in terms of the Nama process?
2.Alot of talk recently about the top 30 developers engaged in nama process,Any update on the Lower reaches of the Nama process?

@Patrick, with respect to the first question, other than the fact that businesses associated with Bernard McNamara and Liam Carroll have been the subject of NAMA receiverships, I have not seen any further updates. If NAMA is disposing of assets it has said that it will comply with the Code of Practice for the Governance of State Agencies 2009 (link below). Nothing has been disclosed about Pat Doherty by which I mean he is not one of the three whose plans are reported to have been agreed or one of the seven that have seen foreclosure action. He may have agreed his plan or he may be one of the five that might potentially face foreclosure action.

As a fairly recent follower of the various posts on this site can I firstly congratulate the author for the high quality of the Material that has been presented.
I note that there has been much talk in the National Media about NAMAs work with its Top 30 Clients so to speak but not much has been written or reported (At least at a national level) of the Work NAMA has been doing (Not Proven) with regards to working with the Lower level of Developers. I enclose two links dealing with NAMA activities in Donegal (My Home County)http://www.donegaldaily.com/2011/04/08/nama-shock-for-donegal-businessmen-face-ruin-as-assets-taken/

It would be interesting to hear the views of the author or indeed others in terms of the issues raised in the above reporting’s and perhaps hear if NAMA officials have indeed undertaken a tour of the country.

@Patrick, as you know NAMA has taken over about €73bn of loans backed by “land and development” loans and also developers’ associated loans. In order to take over the loans, NAMA engaged a panel of valuers which helped value the underlying properties securing the loans. Following the acquisition of the loans NAMA required the developer to produce a business plan showing how they could best repay the loan. NAMA has six strategies for property (1) sell (2) develop (3) demolish (4) mothball (5) rent (6) manage. NAMA employed a panel to review the business plans. And NAMA itself has had to conclude how to proceed.

Long way of saying that properties underpinning NAMA loans might have had three separate NAMA visits. I don’t think there’s anything sinister or unusual therefore in a NAMA visit – they need to know what property is securing a loan and they need form a view on what to do with that property.

One of the articles talks about six (unidentified) businessmen, presumably developers, who might be in NAMA. It’s nigh impossible to verify what is reported. But the tenor of the articles seems a little excited. If the reporting is correct, then it is just reporting what NAMA is doing up and down the country at present, not to mention across the border, the UK and anywhere else there is property securing NAMA loans.